...BANKING HUB-2040.......

India may become world’s 3rd largest banking hub by 2040

ENS ECONOMIC BUREAU
Domestic credit will grow to $23 trillion in 2050, driven by growing middle class and private banks gaining market share ........

MUMBAI, JUNE 26: India is pegged to take the third place as a banking hub after China and the US by the year 2040 as banking sector growth in the major emerging economies of the world would outstrip that in the developed nations before 2050, a report said. The banking sector will grow significantly faster than GDP in the E7 group of emerging economies, consisting China, India, Brazil, Russia, Indonesia, Mexico and Turkey, according to a projection by accounting firm PriceWaterhouseCoopers.

Domestic credit in China alone may overtake Britain and Germany by 2010, Japan by 2025 and the United States by 2050, while India may be the third biggest domestic banking market by 2040, it said. Bank profits from seven of the biggest emerging markets could outstrip the sector’s profits from the current seven leading industrial nations or G7 — the US, Japan, Germany, the UK, France, Italy and Canada — by 2050, the firm said in its report Banking in 2050: How big will the emerging markets get?.
India may rise from the relatively low levels today to emerge as the third largest domestic banking market in the world by 2040 and in the long run it may grow faster than China, the report said. “China will continue to grow somewhat faster than India over the next 5-10 years but after that, Chinese growth will be held back by its rapidly ageing population and diminishing returns to its investment-led strategy,” PwC executive director Jairaj Purandare said.
The new report also forecasts that domestic credit in India would grow to $23 trillion in 2050 from $0.4 trillion in 2004, driven by the growing middle class in cities and private banks gaining market share in the state-run dominant industry. “M&As will encompass consolidation activity “in-market’ as local banks acquire one another, foreign banks enter E7 markets and banks from the E7 expand internationally through acquisitions,” said Nick Page, partner at PwC.
The report examines the possible changes in the scale of the banking sector till 2050 and highlights the pace of change, along with challenges for banks the world over. The projections in the report are based on an analysis of developments in the G7 and E7 since the 1950s. The PwC report said that the E7 banking markets would become more important than ever before in the global banking sector and those institutions, which do not develop strong positions in these markets, would find it difficult to maintain a healthy growth rate in assets and profits.
Continued high levels of deal activity in the E7 markets are expected, although with normal short-to-medium-term cyclical variations over time. Mergers and acquisitions would take place in the sector, with local banks acquiring one another, foreign banks entering the E7 markets and vice-versa, the report said. The E7 markets are relatively high risk, which may be mitigated by making long-term investments in a broad portfolio of emerging banking markets, PwC concluded in the report.
refered from http://www.indianexpress.com/story/202753.html